UK Budget 2021

 

 

March is a very exciting month from a tax point of view with the Budget on the 3rd and a range of tax consultations published on 23rd.

In this episode we outline key tax changes for you and your business, as announced in the UK Budget on 3rd March by the Chancellor of the Exchequer, Rishi Sunak.

In this budget Rishi Sunak delivered a targeted balance of new tax increases and tax reliefs as he tries to support struggling sectors and stabilise the national debt. With the pandemic creating a once in a lifetime cost to the Treasury, there was little that could be given away, yet the Chancellor could not do anything to curtail an economic recovery. Thus, we saw no headline changes to income tax rates or VAT rates: both impact consumer spending and therefore economic recovery. However, the Chancellor did bring in measures to claw back tax revenues. Some of these were obvious, such as corporation tax changes; others were more subtle such as freezing reliefs and allowances. The Chancellor can only hope for a controlled increase in inflation to reduce the real cost of debt and increase tax revenues as a result.

Let’s look at the key elements from a tax perspective and questions raised throughout this episode:

[1:20] Private Client Tax

Julia Rosenbloom, partner - Private Client Tax team

  • We expected to see increases to the capital gains tax rate, but none were forthcoming. For property or other investors and their investment strategies, what should they take from this?
  • In a similar vein, there was little change to the IHT regime. For those concerned about IHT, what would you say to them?
  • Do trusts still have a part to play in personal tax and wealth planning?

View detailed analysis here:

Budget 2021: Capital Taxes
Budget 2021: Income Tax
Budget 2021: The calm before the storm for individuals

[10:30] Employment Tax

John Manis, director - Employer Solutions team

  • We have heard about the government looking at growth shares, yet there was nothing in the Budget on this subject. Can you tell us about growth shares and their use in employee reward structures?
  • What impact will the tax rate changes (and proposed changes to CGT) have on reward strategies for businesses?
  • What other point would you wish to highlight from the Budget?

View detailed analysis here:

Budget 2021: Payroll and employee incentives

[15:07] Corporate Tax

Ray Abercromby, partner - Business Tax

  • Changes to corporation tax rates, and the impact on investment structures and cash extraction
  • Extension to loss carry back rules
  • Capital allowances: increased relief, allied to higher corporation tax rates

View detailed analysis here:

Budget 2021: Business Taxes
Budget 2021: A budget designed to support growth and investment

[20:45] VAT and indirect taxes

John Rainsford, director – Business Tax

  • How was the Budget from a VAT perspective?
  • What has the government done on Covid-related changes?

View detailed analysis here:

Budget 2021: VAT and indirect taxes

[22:40] Research and Development

Barnaby Redwood, director – Business Tax

  • We have seen changes to the small and medium enterprise relief. Can you give us an overview of what these changes are?
  • In addition to the Budget, what other – wider – changes are coming down the track?
  • What are Smith & Williamson’s views on what can be done to make the UK’s R&D reliefs work better for business?

 

 

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This episode was recorded on  08/03/2021

 

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Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. Clients should always seek appropriate tax advice before making decisions. HMRC Tax Year 2021/22.

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Podcast information:

The Pulse from Smith & Williamson

UK Budget 2021 

Episode 5

Broadcast on Smith & Williamson at 09:00, 10th of MARCH 2021

Available online from 10:00 on the same day .

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